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West Coast Biotech Roundup: BioMarin, Tocagen, Medivation, Twelve

Thu, 08/27/2015 - 15:32

For the ancient Greeks, the rising of the dog star Sirius brought on the sweltering heat of summer, and August came to be associated with languid days of heat, drought, and fire.

That might sound like the weather that has descended on the West Coast. But in the ancient texts, the dog days of summer are over by late August—and we’re just getting started. In Southern California, the hot desert winds come down from the mountain passes like runaway freight trains in the fall. Anything can happen. Stocks explode upward after days of monster losses. Google spins out its life sciences group. And I step in as master of ceremonies for our roundup of West Coast life sciences news. So here are this week’s revelations…

—Late last week Alphabet president Sergey Brin announced in a blog post that the Google X life sciences group would be the first to get more autonomy under Google’s new Alphabet holding-company strategy. The as-yet-unnamed life sciences group will still be headed by Andy Conrad, who has been overseeing projects like the Baseline health study and a “smart” contact lens while part of the Google X skunkworks.

—BioMarin (NASDAQ: BMRN) sold its late-stage breast cancer drug talazoparib to Medivation (NASDAQ: MDVN) for $410 million upfront and $160 million more in possible milestones. The deal gives San Francisco’s Medivation a near-term possibility for a second commercial product, and it gives Novato, CA-based BioMarin cash as it prepares for a possible approval of its drug drisapersen for Duchenne muscular dystrophy. The FDA is due to decide whether to approve drisapersen or not in late December.

—Medical device giant Medtronic (NYSE: MDT) bought Twelve, a Redwood City, CA-based startup working on a transcatheter mitral valve replacement. Twelve is so named because it’s the 12th company spun out of Bay Area medical device incubator The Foundry. Medtronic agreed to pay as much as $458 million.

—After co-founding Inception Sciences in San Diego and establishing the Blueline Bioscience incubator in Toronto, San Francisco’s Versant Ventures has created Highline Therapeutics in New York to spin new drug companies. Versant’s Carlo Rizzuto told … Next Page »

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Achates CEO on Growth, Obama’s Climate Plan, Fairbanks Morse Deal

Thu, 08/27/2015 - 11:21

In April, San Diego-based Achates Power announced it was opening a Michigan office to capitalize on the market momentum of its opposed-piston engines. I caught up with Achates CEO David Johnson this week to find out how things were going.

“We have a great facility,” Johnson said, referring to the company’s recently opened Customer Application Engineering Center in Farmington Hills, MI. “We are very, very busy. It’s a steady drumbeat in terms of growth. We have about 10 people working in Detroit but we have space for 25, and I’m sure we’ll fill it.”

Last Spring, Johnson told Xconomy that the next phase of the business involved licensing its technology to high-volume manufacturers and continuing to refine its two-stroke, three-cylinder engine prototype. Achates touts its engine as cleaner, cheaper, and more fuel-efficient than traditional internal combustion engines, and it can be used in cars, trucks, military vehicles, ships, and power generation.

That plan appears to be taking off with the announcement earlier this month that Fairbanks Morse, a Beloit, WI-based manufacturer of large engines for marine, power generation, and oil and gas applications, is developing a new range of medium-speed, opposed-piston diesel and dual-fuel engines that incorporate Achates technology.

“What our customers see is that we’re able to offer the biggest improvement for the lowest cost,” Johnson said. The Achates engine has proven to be up to 30 percent more fuel efficient compared to the best clean-diesel, light-duty engines, he said, and 85 percent more efficient compared to gasoline engines. “That’s a different order of magnitude,” he added.

Fairbanks Morse will begin producing the new engines next year at its 7,800-square-foot research lab in Beloit, and the engines should be on the market by 2017, Johnson said.

Work also continues on a project Achates has underway with TARDEC, the U.S. Army tank and automotive research center in Warren, MI, and Cummins. TARDEC awarded a second contract worth $14 million to Achates earlier this year to help develop the Advanced Combat Engine as part of the Army’s 30-year strategy to modernize tactical and combat vehicles.

Johnson said the Obama administration’s Aug. 3 announcement of a revised clean power plan, which aims to cut greenhouse gas emissions from U.S. power stations by nearly a third within 15 years, is also good news for the company.

“Achates is so well positioned to help meet these guidelines, but there is a lot of work to do,” Johnson said. Though he declined to get into specifics, Johnson said that Achates has signed contracts to develop products for “companies selling 40 percent of the world’s cars and trucks.”

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Private Code Academies Stake Their Claims in San Diego

Tue, 08/25/2015 - 01:29

Private “coding academies”—vocational schools that provide accelerated training for software development jobs—have begun to sprout in San Diego.

The newest arrival, Origin Code Academy, is recruiting students for its first class on Sept. 21, and says it is the first coding education provider in San Diego “to guarantee its students a software development job within 90 days of graduating.”

Actually, that’s not saying that much. At a time when code schools have been proliferating in tech hubs like San Francisco, Seattle, and New York (San Francisco has over 30), Origin Code Academy is only the second software-focused school to open in San Diego.

In the Bay Area, some programming bootcamps, such as the San Francisco-based App Academy, require no up-front tuition. But the job prospects are so good that App Academy asks students to pay 15 percent of what they earn during their first year on the job. That works out to $15,000 for a job that pays $80,000 a year.

In San Diego, Origin is focused mostly on teaching students programming languages related to Microsoft’s .NET framework, including C#, Javascript, CSS, and HTML, with courses ranging from $3,500 to $12,000.

Jeff Winkler

Origin founder Jeff Winkler says he moved to San Diego earlier this year from Raleigh, NC, where he had developed and sold a mobile app called GymXchange—and where “there are five different code schools just in one building.”

Winkler said he chose San Diego partly because he already had some business contacts here, and partly because there was so little competition. “I looked around and asked myself, ‘How is there only one code school in San Diego? It’s a big market… Every young person wants to move to San Diego.”

It’s a good question.

A survey of local businesses in 2011 found there were as many as 6,000 unfilled openings in IT jobs throughout San Diego County. Even today, “If you look at the high-tech sector in San Diego, the shortage [of skilled employees] is most acute in software engineers,” said Kevin Carroll, executive director of the industry group Software San Diego.

“There’s a big perception outside of San Diego that San Diego is just about biotech,” said Neal Bloom, a San Diego tech entrepreneur who joined Hired, the San Francisco-based job matching service, almost three months ago. But “there are a lot of software jobs in San Diego,” he said.

In a recent e-mail, Winkler said the higher cost of doing business in California could be a factor in the scarcity of code academies in San Diego. “It’s tough to overcome the perception that moving to California is a tough place to do business to the outside world,” he wrote. “If you do choose California and have to pay the price, people want the benefit of access to capital in San Francisco.”

A shortage of Web developers in San Diego prompted Rob Kaufman of Notch8, a Portland, OR-based Web development firm, to start Learn, a subsidiary that last year became the first coding school in San Diego. Learn focuses mostly on teaching the Web programming languages Ruby on Rails and JavaScript.

Kaufman said he established an outpost for Notch8 in San Diego to provide Web development services for local businesses—but they had trouble hiring enough developers. “Learn was born out of a Ruby on Rails consultancy—and we needed developers,” Kaufman said. In retrospect, he added, “We see very much a synergy between the code school and [IT] consulting.”

After starting Learn late last year, Kaufman and his wife Chelsea recently graduated their second class from their Learn coding bootcamp in North Park. Their third class begins Sept. 8, and it’s already over-subscribed, with 22 students willing to pay $9,000 each for a program that consists of three months of classroom instruction and a one-month internship. (Such internships often lead to job offers, the Kaufmans said, but there is no job guarantee at Learn.)

The bootcamp has been so successful, Kaufman said they are moving to separate the Learn business from Notch8.

Origin Code Academy is providing its 12-week course at Co-Merge, a shared workspace in downtown San Diego. Before moving to San Diego, Winkler said he attended a coding bootcamp in Orlando, FL, and was underwhelmed by the support it provided for placing students in programming jobs. Of eight people in the class, which ended March 15th, only one has a programming job today, Winkler said.

“People weren’t job-ready,” Winkler said, explaining that the program was focused on all the wrong things. “Our only focus should be on getting people jobs,” he said. As a result, Winkler said he’s made job placement a priority at Origin.

“We’ve developed our curriculum in very close partnership with a number of tech employers from the San Diego area,” he said. “So we’re teaching the programming skills that are currently in high demand—and putting our students in a position to quickly obtain a software or app development job.”

In a statement, Origin says, “graduates are guaranteed a software development job within 90 days of graduation—or the tuition will be fully refunded.”

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Versant Walks Biotech “High Line” With a New Manhattan Incubator

Mon, 08/24/2015 - 08:55

Versant Ventures is about to launch its latest biotech incubator. And it’s picked the emerging New York life sciences scene as its home.

This morning, Versant, the San Francisco Bay Area VC firm, is announcing the formation of what’s being called “Highline Therapeutics.” Named after the elevated walkway and park that runs along the lower west side of Manhattan, Highline will be Versant’s third biotech incubator. Its office, in fact, will be a few avenues away from the actual High Line: in Chelsea, on 21st St. and 6th Ave.

“We felt like we had to at least be in the general vicinity of it,” says Carlo Rizzuto, a Long Island native who will run Highline. He previously headed Versant’s European headquarters in Switzerland. (In case you’re wondering, he’s not related to famous Yankee shortstop Phil “the Scooter” Rizzuto.)

Versant’s incubators aren’t incubators in the traditional sense. They’re not co-working spaces for startups. Rather, as my colleague Alex Lash has written, Versant has used them as regional outposts to work directly with academic institutions and create small, nimble biotechs—companies often created around a single drug with a prearranged buyer. The other two of these incubator-like entities are Inception Sciences, of San Diego, Vancouver, and Montreal; and Blueline Biosciences of Toronto.

In similar fashion, Highline will work with the city’s big research institutions to create new companies that will take two forms. Some will be spinouts of academic research that is what Rizzuto calls “company ready.” One such startup that could be announced soon, for instance, is the result of a collaboration between Versant and Columbia University professor Brent Stockwell.

Highline aims to do one to two of these deals per year.

The second type of effort will center around research in even earlier stages that needs translational funding—which would come from Versant—to see whether it’s worth turning into a company. Versant is already doing this type of work with Weill Cornell Medical College, Rizzuto says, and is in advanced talks to do something similar with NYU. Highline should do 4 to 5 of these projects each year, he adds.

With Highline, Versant also wants to tap into academic centers south of Boston in places like Connecticut (Yale University), Pennsylvania (UPenn), and Maryland (Johns Hopkins University).

But the incubator will remain New York-centric, which is a big deal for the area. I’ve written extensively about the past and current struggles of the Big Apple’s life sciences scene. It has been hamstrung by academic institutions’ formerly combative mindset, a dearth of biotech VC funding, and the seemingly never-ending struggle to secure and develop affordable lab space.

But the past few years have brought change and new initiatives. For example, The New York Genome Center and Tri-Institutional Therapeutics Discovery Institute were formed in 2013 via collaborations between a number of the region’s institutions.

The New York City Economic Development Corp. formed a $150 million life sciences fund with the help of local companies, government agencies, and VC firms Flagship Ventures and Arch Venture Partners. The NYCEDC also has a separate … Next Page »

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West Coast Biotech Roundup: Adaptive, Synthorx, USC v. UCSD, 23andMe

Thu, 08/20/2015 - 19:29

The West Coast, according to the self-aggrandizing myth, is a place of re-invention, non-conformism, un-convention. You see this box, man? Our brains are over here, thinking outside of it. It’s all good. Just ask Don Draper.

Sometimes it just leads to a new Coke commercial, at least in Mad Men’s retelling of the tale, but sometimes it leads to entirely new industries devoted to, um, social isolation and distracted driving.

Hey, let’s not let the tech folks have all the boundary-breaking fun. In West Coast biotech this week, the news indeed featured business-expanding, if not mind-expanding, moves. In Seattle, Adaptive Biotechnologies served notice it would move beyond immune sequencing for research and diagnostics and into drug discovery, spurred by its massive fundraise this spring and new sequencing technology. It was reminiscent of a similar business shift in the San Francisco Bay Area, where genomic test maker 23andMe said in March it would start a drug R&D group run by former Genentech top scientist Richard Scheller.

(With the way the FDA is approving drugs these days, as Forbes‘ Matthew Herper points out this week, who wouldn’t want to be in that  business?)

This week, 23andMe unveiled a new CFO as it moves into this new phase. The man behind the green eyeshade will be Dean Schorno, who was previously CFO of—wait for it—Adaptive.

In San Diego, sequencing giant Illumina and two VCs unveiled plans to open a genomic app store called Helix. The idea is to offer average Joes and Janes apps that shed light on their genetic makeup. Third-party developers would build the software, and Helix would do the sequencing and store the information, ostensibly making it easier and faster for consumers to come back and order more apps. Antonio Regalado has a thorough explanation of it in Technology Review.

That’s a lot of thinking outside the box for one week, but it helps compensate for the time we’ll have to spend hiding under the box when El Niño hits. Meanwhile, keep calm and get your roundup on.

—Adaptive Biotechnologies of Seattle said Wednesday that a new sequencing tool would give the firm a leg up in helping cancer immunotherapy companies develop better therapies that use modified T cells. Adaptive’s CEO and CSO—brothers Chad and Harlan Robins—also told Xconomy that the company will build its own pipeline of therapeutics for infectious disease. The tool, pairSEQ, was described in a Science Translational Medicine paper.

—Staying in Seattle, Presage Biosciences said Thursday that Takeda Ventures has taken a stake of undisclosed size in the privately held company, which is developing a system dubbed CIVO that aims to test cancer drugs in miniscule amounts by injecting them directly into a patient’s tumor. It’s at least the second time a drug company working with Presage’s technology has invested in Presage, as well. Two years ago, Celgene (NASDAQ: CELG) invested $13 million. Xconomy reported in April that Presage had begun its first human trials of CIVO.

—In the Bay Area, genomic data firm 23andMe said Dean Schorno would be the firm’s new CFO. Schorno was previous CFO of Adaptive Bio for a year, and before that spent more than a decade at Genomic Health.

—In Berkeley, CA, the nonprofit Innovative Genomics Institute is working with Children’s Hospital in neighboring Oakland on sickle cell disease research that could signal an important step forward for the new gene-editing technology known as CRISPR/Cas9. In my latest column, I reported on IGI’s work and on other developments in the all-too-thin field of options for sickle cell treatment.

—San Diego’s Synthorx said it has coaxed bacteria to produce proteins not found in nature, using synthetic DNA inserted into the cellular nucleii. As our own Bruce Bigelow reported, the company’s technology could open the way for new methods of producing biologic drugs. SynthoRx is based on technology developed by Floyd Romesberg of The Scripps Research Institute.

—Another Bigelow cup of tea: Bruce reported Wednesday that the University of Southern California has made a surprise move in its legal fight with UC San Diego, firing its law firm and asking that the case be moved to federal court. The schools are fighting over control of an Alzheimer’s … Next Page »

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Synthorx Makes Proteins Using Expanded Alphabet of Synthetic DNA

Thu, 08/20/2015 - 02:27

A synthetic biology startup that grabbed headlines last year by inserting synthesized DNA in bacteria—and getting it to replicate—said yesterday it has taken its technology a step further—engineering the bacteria to make proteins that don’t exist in nature.

The advance announced by San Diego-based Synthorx has not yet been reported in a scientific journal, as the company plans to keep some aspects of its work secret. But if the results hold up, the process pioneered by Synthorx could open the way to important new methods for producing an enormously diverse range of biologic products, including antibody drugs for cancer, vaccines, and both large and small protein therapeutics.

“You can literally make millions of proteins on a daily basis,” Synthorx CEO Court Turner told me yesterday afternoon.

Using synthetic DNA to make proteins is an unprecedented advance because the technology can incorporate multiple and different amino acids into proteins—and do it in a robust and scalable way, Turner said.

Synthorx is now poised to produce proteins that include scores of amino acids that don’t exist in nature. The company intends to use the technology to develop its own internal drug discovery pipeline, and to seek partnerships with big biotech and pharmaceutical companies that can use the technology to expand and diversify their own drug discovery and development processes.

Turner, who does double duty as a venture partner with San Diego’s Avalon Ventures, helped found Synthorx last year on technology developed in the lab of Floyd Romesberg of The Scripps Research Institute. Avalon joined with San Diego’s Correlation Ventures to make an undisclosed seed-stage investment in Synthorx.

The startup now has eight full-time employees, which will expand to 10 or 12 by mid-2016, and has enough cash to operate well into 2017, Turner said.

In landmark research published last year in the journal Nature, Romesberg’s team created two synthetic nucleotides dubbed X and Y (d5SICSTP and dNaMTP), and successfully inserted the unnatural base pair in DNA, which normally consists of four nucleotides (A,C, T, and G). The team then coaxed E. coli bacteria containing the synthetic DNA (with six nucleotides—A,C,T, G, X, and Y) to successfully replicate with no changes in its synthesized DNA.

Synthorx says the integration of the X and Y synthetic nucleotides with DNA significantly expands the genetic alphabet, and promises to allow for site-specific incorporation of multiple, different novel amino acids into a single protein.

More letters in the genetic alphabet makes for more possible codons—the three letters that link to a particular amino acid building block. Synthorx said last year that its technology made it theoretically possible to use the 20 existing amino acids with as many as 152 synthetic amino acids to assemble proteins that would be unknown in nature and have a host of new functions.

The work begun in Romesberg’s lab subsequently moved to Synthorx, where scientists used the synthesized DNA and the cellular machinery that assembles proteins from amino acids to make full-length and functional proteins out of amino acids that don’t exist in nature.

Asked if the process is analogous to the development of combinatorial chemistry in the 1980s and ’90s, Romesberg replied in an e-mail, “Combichem promised to identify compounds with new structures but composed of the same types of groups.

“The technology that Synthorx and my lab are developing promises to add entirely new types of groups to proteins (which are of course now validated therapeutics) which should not just optimize already existing activities (or arrangements of atoms like combinatorial chemistry does) but to add completely new functions.”

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USC Makes Federal Case Out of Dispute Over Alzheimer’s Study

Wed, 08/19/2015 - 11:38

In a surprising turn of events, the University of Southern California has moved a bitter legal dispute with UC San Diego over a prestigious Alzheimer’s disease research program to federal court—and replaced the law firm that was handling its case.

Lawyers for USC filed a notice of removal of the dispute to federal court on Aug. 10, just days after San Diego Superior Court Judge Judith Hayes issued a preliminary injunction, ordering  USC and others to restore control over the nationwide Alzheimer’s study to UC San Diego. Hayes subsequently cancelled hearings she had scheduled in the case, which was headed to a state trial on the merits.

USC also has replaced the Costa Mesa office of the Paul Hastings law firm with Quinn Emanuel Urquhart & Sullivan, a prominent, litigation-only law firm based in Los Angeles, according to a notice filed with Hayes’ court on July 29.

The case was assigned to U.S. District Court Judge Roger Benitez, and on Monday, lawyers for USC filed a motion to dismiss the civil lawlsuit that UC San Diego had filed in state court, arguing, among other things, that UC San Diego had failed to cite specific facts in legal documents submitted to Judge Hayes.

Meanwhile, Hayes’ order remains in effect, and a special master is expected to proceed with instructions to ensure that USC restores complete control over the Alzheimer’s research program to UC San Diego. In issuing the order on Aug. 5, Hayes wrote that UC San Diego “demonstrated a likelihood of succeeding on the merits of one or more claims” made in its lawsuit.

Before Judge Benitez can consider USC’s motion to dismiss, however, he is expected to determine whether the case belongs in federal court. In documents submitted in federal court, USC argues that the case belongs in federal court because UC San Diego cited federal copyright law in its filings.

But a lawyer for UC San Diego said he plans to ask the judge to send the case back to state court.

“Our claims against USC and Aisen do not raise federal claims,” said Dan Sharp, a San Francisco-based lawyer representing the University of California. “They are claims under state law.”

The dispute began in June, after USC hired scientist Paul Aisen and roughly 30 members of his team from UC San Diego, where Aisen has worked since 2007 as director of a federally funded research center known as the Alzheimer’s Disease Cooperative Study (ADCS).

UC San Diego established the ADCS in 1991, with funding from the National Institute on Aging. The agency renewed its funding in 2013 through a five-year grant of up to $55 million, and additional funding from pharmaceutical partners and donations has raised total funding for the center to roughly $100 million.

Problems erupted, however, when it became clear that Aisen intended to carry the ADCS center and its funding to USC—while UC San Diego expected to retain the center.

The case began attracting wide attention among academic research centers after UC San Diego sued USC, Aisen, and other defendants on July 2, arguing that USC and Aisen had conspired to  “misappropriate” the ADCS program to USC.

UC San Diego also contends that Aisen and his team took root control of the ADCS computer system and database, which has prevented UC San Diego from meeting its contractual obligations for overseeing the multi-faceted research program and ensuring the integrity of research data.

As the case wears on, however, it’s becoming clearer that a crucial bone of contention is the computer network developed to manage Alzheimer’s research at 70 sites throughout the U.S. and Canada—and especially the customized electronic data collection (EDS) system that Aisen’s team created while they were employed at UC San Diego. The EDS system contains data from clinical trials conducted under the ADCS program over the past 24 years.

Much of Aisen’s core team moved with him to USC, which has argued, ironically, that UC San Diego no longer has the personnel with the specialized knowledge needed to properly maintain the computer system and database so as to protect the data and maintain its integrity.

As lawyers for UC San Diego put it in legal arguments submitted in state court, “The EDC system, and the underlying software programs and ADCS data are owned by the [University of California] Regents and [pharmaceutical] sponsors, as clearly set out in the Copyright Act, applicable federal regulations, University of California guidelines, and by the clear terms of the grant contracts.”

USC’s move doesn’t necessarily mean that Judge Benitez will accept the case, even if federal claims are part of the case. A USC spokesman did not respond last night to a request for comment on developments in the case.

“This is not a copyright case,” said Sharp, the lawyer for UC San Diego. “This is a case of Dr. Aisen and USC taking our computer system.”

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100 Years But Only One Drug: Sickle Cell Patients Wait For Help

Tue, 08/18/2015 - 11:08

Last week, 100,000 Americans with sickle cell disease and millions more around the world got encouraging news. Investors gave a vote of confidence, in the form of a $120 million IPO, to Global Blood Therapeutics (NASDAQ: GBT), a four-year-old biotech working on a pill that could become the biggest medical advance ever for the disease.

That pill, which just began its first human trial in January, is a once-a-day medicine that a patient would have to take for life. If approved, the drug would be only the sickle cell treatment to potentially halt the effects of the disease. The lone drug currently on the market for the disease only addresses some of its symptoms.

Patients with sickle cell disease carry a mutated form of hemoglobin that causes normally disk-like red blood cells to change into rigid crescent-shaped cells. Those misshapen cells get hung up in the blood vessels, wreaking all sorts of havoc. In the face of the disease’s worst complications—strokes, deadly lung complications, bouts of excruciating pain, anemia, and more—one pill a day doesn’t seem like much burden. (Global Blood CEO Ted Love declined to answer questions, citing quiet period regulations.)

But even more tantalizing hope lies on the horizon. Gene therapy, ideally a one-shot cure, could arrive in the next decade.

“The first documented sickle cell patient was in 1910, and we only have one medication,” says Sonja Banks, president of the Sickle Cell Disease Association of America in Baltimore, MD. “Anything cutting edge is great; we’re so far behind in the game.”

Banks is fully aware that, as with any new area of medicine, there are still hurdles to overcome in the field of gene therapy, which has seen a renaissance in the past few years. Just recently two gene therapy companies, Celladon (NASDAQ: CLDN) and Avalanche Biotechnologies (NASDAQ: AAVL), cratered after terrible late clinical results, while others, namely Spark Therapeutics (NASDAQ: ONCE) and Bluebird Bio (NASDAQ: BLUE), have watched investors flee the stock despite no public setbacks.

And gene therapies for sickle cell, specifically, have a long, long way to go. Bluebird has one in development, called LentiGlobin, and it’s the most advanced. Positive data from a single patient was enough to cause a stir earlier this year, as my colleague Ben Fidler reported.

The therapy requires extracting a sample of the patient’s hematopoietic, or blood-producing, stem cells from the bone marrow, modifying them outside the body, and giving them back to the patient. The technique uses a virus to deliver a healthy copy of the hemoglobin-beta gene into the stem cells. It’s supposed to be a gentler version of bone marrow transplant, which is the only cure so far for the disease.

A bit farther behind Bluebird is a different form of gene therapy, called gene editing, and it should soon provide early milestones in two very different programs. One is based on CRISPR/Cas9, the gene editing system that has spread around the world’s research labs because it’s so easy to use. Three startups—Crispr Therapeutics, Editas Medicine, and Intellia Therapeutics—have raised hundreds of millions of dollars, collectively, to move the system forward into human therapeutics. They have in recent months revealed plans to work on cancer immunotherapy, blood diseases known as hemoglobinopathies (sickle cell is a hemoglobinopathy), and, most recently with Editas, a genetic form of blindness.

But the first data on a CRISPR/Cas9 therapy for sickle cell disease—or any disease, for that matter—to be unveiled could come from a nonprofit effort.

At the Innovative Genomics Initiative, a University of California-funded group on the Berkeley campus, researchers collaborating with Children’s Hospital in nearby Oakland, CA, have been trying to cure sickle cell disease in mice. (IGI was cofounded by Jennifer Doudna, the Berkeley professor who helped turn CRISPR/Cas9, a bacterial defense system, into a gene editing tool. How much she invented is in dispute, as I detailed most recently here.)

IGI scientific director Jacob Corn and colleagues should know in less than two months if their experiments have worked. They’ve removed the hematopoietic stem cells from mice with an approximate version of sickle cell disease, replaced the mutated gene with the healthy version using CRISPR/Cas9, and put the cells back into the mice. Will their blood contain sickled red blood cells? Will the stem cells that repopulate their bone marrow have the sickle mutation? If so, in what numbers?

Corn declines to project what kind of data would move the program closer to a human trial, or to speculate on the timing of a trial , which would take place at Children’s Hospital. But he feels the urgency, not just from doctors and patients but from other academics who are “hot on this trail,” he says.

Taking hematopoietic stem cells out of the body, editing them, and putting them back into the bone marrow to spawn healthy versions of red blood cells is an obvious use of gene editing. “People have wanted to cure sickle cell disease for a long time this way,” says Corn. “It’s a very worthwhile problem, and it’ll be huge when someone cracks the nut. We hope to be the first.” (IGI researchers have used a technical advance that they hope will persuade the edited cells to function properly when reintroduced; Corn declined to reveal the technique until the data are published.)

Gene editing might be a quantum technological leap, but, like Bluebird’s LentiGlobin gene therapy, it would still require a form of bone marrow transplant. When the cells are taken out for editing, the patient’s remaining bone marrow cells would be killed, a precarious procedure that leaves the patient with a compromised immune system for a period of time.

The hope, however, is that both the gene therapy and gene editing approach will lessen the severity and … Next Page »

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WaVe Joins the Crossover Party With $66M Series B for RNA Drugs

Tue, 08/18/2015 - 10:52

Another week, another startup biotech that has amassed the type of investor group that can support an initial public offering. This time, it’s Boston-based WaVe Life Sciences.

WaVe, a startup trying to develop so-called “stereopure” RNA drugs, today raised a $66 million Series B round from a group of crossover investors that back both private and public companies. Several of the names in WaVe’s round have participated in other recent crossover-fueled rounds for startup biotechs, like Editas Medicine and Ovid Therapeutics, which both closed their deals last week. WaVe’s new backers are Foresite Capital (which led the funding), Fidelity Management and Research, New Leaf Venture Partners, Redmile Group, Jennison Associates, Cormorant Asset Management, and Clough Capital Partners. WaVe’s existing investors, RA Capital Management and Kagoshima Shinsangyo Sosei Investment, also took part.

WaVe just raised an $18 million Series A in February, and CEO Paul Bolno said at the time that the company had put together a “substantial” amount of cash from founding investor SNBL, a Japan-based CRO, before that (he didn’t specify when or how much). But a syndicate like this has become common in biotech these days, and is often a precursor to an IPO—either in the short-term or down the road. Berkeley Heights, NJ-based Edge Therapeutics, for instance, brought in crossover backers in April and just filed for an IPO last week. Moderna Therapeutics, of Cambridge, MA, on the other hand, raised a $450 million war chest from crossovers in January and deflected the idea of an IPO anytime soon.

The company declined to comment beyond its release this morning.

WaVe is getting the cash to advance RNA drugs that it contends could last longer in the body, and be more safer and more potent than the ones being developed by other, more established companies. Using a proprietary chemistry method, the company has developed a way to control the “chirality”—chemistry’s version of handedness—of the RNA molecules it produces. WaVe’s contention is that chirality is important for RNA drugs, and that ignoring it can lead to less pure, less effective therapies. (You can read more about that argument in this story on WaVe’s Series A in February.)

To test its claim, the company is starting out developing antisense and exon-skipping compounds, the type for which Isis Pharmaceuticals (NASDAQ: ISIS) and Sarepta Therapeutics (NASDAQ: SRPT) are known, though Bolno has said WaVe’s method could be applicable for other RNA-based approaches, like RNA interference. WaVe says in its announcement today that it’s developing a group of RNA drugs for rare disorders, among them Huntington’s disease and Duchenne muscular dystrophy. It hopes to file papers with the FDA by the end of 2016 to begin its first clinical trial.

“We believe WAVE’s antisense and exon-skipping candidates have the potential to deliver enhanced efficacy and safety for patients across a number of diseases compared to other approved and investigational nucleic acid therapies,” Bolno said in a statement.

WaVe was formed out of the merger of two small companies: Chiralgen of Japan, and Boston’s Ontorii. Its name is an amalgam of the last names of the scientific founders of Chiralgen and Ontorii: Tokyo University of Science professor Takeshi Wada, and Harvard University chemical biologist and Warp Drive Bio founder Greg Verdine.

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Food Tech Peach Raises $8M as First Course, Plans Entré in Boston

Tue, 08/18/2015 - 02:30

After expanding to San Diego in May, Seattle-based Peach says it has raised $8 million in venture funding to bring its lunch ordering technology to Boston this October, and to Washington D.C. by early next year.

In a statement today, Peach says Seattle’s Madrona Venture Group led the current Series A financing round, which was joined by Paul Allen’s Vulcan Capital. Madrona, Vulcan, and Maveron all contributed to the $2.7 million in seed funding that Peach raised in mid-2014.

Three ex-Amazon software developers, Nishant Singh, Chenyu Wang, and Denis Bellavance, founded Peach in early 2014 to develop Web-based technology that provides order processing and food logistics services to restaurants under a revenue-sharing agreement. The company’s analytic software helps predict each restaurant’s order volume a week in advance and optimize delivery routes. It can even help drivers find the best parking spots for each delivery run.

The move to Boston marks Peach’s third expansion. The startup faces a market crowded with such rivals as GrubHub, Foodler, Favor, Caviar, and Chef Nightly, a Blade portfolio company that began offering its AI-based meal ordering service in Boston earlier this year.

“We look for high-density workplaces and interesting food options—most cities have that, definitely Boston and DC,” Peach co-founder and CEO Singh wrote in an e-mail.

In the statement released today, Madrona managing director Scott Jacobson says, “Nishant and his team have built a two-sided marketplace that works incredibly well for both restaurants and eaters. While there is no shortage of companies in this category, Peach is the first to design a service that delights both constituencies equally.”

Peach has sought to differentiate its takeout ordering service by focusing on the lunchtime takeout business among major employers, and making the process as simple as possible by using an SMS/text-based ordering system. Peach sends a daily text to registered members that offers a lunch dish of the day and just two alternative options—“lite” and vegetarian. Members simply reply “yes” to place their orders, which are delivered during the lunch hour.

Peach partners with restaurants that provide workplace lunch deliveries, and recently added technology that helps restaurants provide catering services. The company says it has delivered more than 400,000 meals since it began operating in Seattle in June, 2014.

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Reframing the Conversation About Technology and Government

Mon, 08/17/2015 - 07:20

When the conversation turns to government and technology, all too frequently the narrative becomes one of hopelessness.

Healthcare.gov, the ancient computer sitting on the desk at the DMV, and the recent attacks by hackers on various government departments all help to reinforce this story of futility. And, inevitably, the questions get framed as, “Why can’t government be more like”—insert your favorite technology company here, Google, Apple, Amazon, etc.

Yet it’s important to remember that companies like Google and Apple are organizations with their own pathologies. Apple almost failed as a company. And not everything Google does is a success. Google Glass and Google+ both spring to mind. It’s important that we don’t follow that narrative path blindly, but, instead, carefully analyze where the technology comparison between the public and private sectors is valid, and where it isn’t.

After all, when it comes to the digital world, there are laggards and leaders in both government and business. That’s why it’s so difficult to make broad and sweeping assertions about relative technological prowess. Indeed, the technology sophistication within the airline, health insurance, and even retail industries varies greatly. The recent computer-based scheduling problems or the endless healthcare paperwork one has to fill out, suggest that not all companies are paradigms of technology efficiency. And the proficiencies around technology adoption and data-driven decision-making in industry vary just like they do in cities, counties, states, and countries. There are actually many governments—or, at least, parts of governments—that quietly use technology very effectively.

The challenge for everyone in both the private and public sector is that consumers expect the level of service and responsiveness of government technology to rival the very best of what they experience in consumer technology.

But the consequences of failing to live up to those expectations are different for government and enterprise. When a company fails to deliver technology that measures up, it loses market share, revenue and margins—and eventually puts itself out of business. When a government can’t deliver technology that improves the quality of life for citizens, there’s a crisis of confidence.

And that’s the position that many governments find themselves in today. With voters used to a steady stream of technology breakthroughs or services that feel intuitive and easy, there’s a strong sense that the public sector is either unable to effectively deliver digital services or can’t do so at a pace that the public is increasingly accustomed to. In either case, the risk is that government slowly erodes its credibility. This isn’t a hippie revolution based on values; it’s a boring and slow-moving rebellion based on expectations.

So, how can the digital laggards in the public sector catch up? The same way that the digital laggards in the private sector can—by recognizing the tremendous sea change that technology and data-driven decision-making represents and shifting their culture and organizational roles to meet modern technology demands.

And, thus, for all the talk of gadgets and technology, a huge part of the problem is one of human capital.

Not only is there a shortage of people that are fluent in understanding and using data, but older organizations may not even know how to recruit, manage, and leverage people with these skills.

For their part, governments face a unique challenge in this area.

We need more public sector employees with sharp-edged data literacy and technology skills. Yet we also need them to have a strong and solid set of public service values and ethics that will prevent them from misusing data and driving “evidence-based public policy” in the wrong direction, or in wrong ways that exploit or mislead people.

Finding these employees, and paying them a salary competitive with what they can earn in the private sector, will not be easy. But there are numerous Massive Open Online Courses that offer introductions to data science. And, happily, there are large numbers of open data sets for aspiring students to play with. More challenging is finding places to discuss the implications and ethics of this. It would be great to see government leaders and employees diving into books like “Seeing Like a State” or “Ethics of Big Data” to educate themselves.

There have always been legions of people willing to choose City Hall over Silicon Valley when making definitive career decisions. But we need to help them before and during their careers so they can become fluent in technology and literate with data. If not, our crisis of confidence in government could continue for some time.

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Bootstrapping Fast Growth: Q&A with Cognitive Medical’s Doug Burke

Mon, 08/17/2015 - 01:01

Last week, Inc. magazine released its 34th annual list of America’s fastest-growing private companies, which highlights 5,000 businesses of all kinds.

The top-ranked business in the San Diego area, which ranks among the magazine’s list of “fastest-growing metro areas” (with 96 companies that qualified, based on their increased revenue growth from 2011 to 2014), sells commercial transportation insurance. The San Diego ranking also features fast-growing retailers, real estate firms, construction companies, and other mainstream businesses.

Among San Diego’s innovation-focused startups, though, Cognitive Medical Systems stands out as a healthtech startup that has managed to increase its revenue by 3,499 percent (from 2011 through 2014) without taking any venture capital or outside funding.

Cognitive was founded in 2010 to develop custom software for federal and commercial healthcare entities. In 2011, Cognitive had 4 employees and generated $143,800 in revenue. By 2014, Cognitive had 60 employees—about 40 are in San Diego—over $5.1 million in revenue, and more than $9 million worth of booked business.

According to president Doug Burke, “We must, as a society, do a better job of educating consumers of healthcare earlier on in life. We will all face very difficult healthcare decisions in our lives.”

At Cognitive, Burke says, “We dream of products and services which can help the clinical care staff and the patients/families make better decisions about healthcare. This spans the range from clinical decision support (real-time information delivered at the point of care, which is both contextually relevant to the care setting but also to the entire digitized healthcare history of the patient) to patient education.”

To explain how Cognitive has accomplished its strong revenue growth while carrying out its vision for improving healthcare decision-making, Burke agreed to answer a few questions from Xconomy by email. His answers have been condensed somewhat, and edited for clarity.

Xconomy: How has Cognitive funded its operations to date?

Doug Burke: The four founders bootstrapped the company with our own cash.  We’ve funded everything else out of cash flow from projects that we do in healthcare IT with the federal government (Department of Defense, Veterans Administration, and Health and Human Services).

X: Doesn’t bootstrapping usually constrain a startup’s ability to grow?

DB: It certainly can.  Of course that depends upon how much money you put in initially and what you’re trying to accomplish as a company.

We’re strong believers that we’re better managers of the money we put in, versus “other people’s money.” Also, we fundamentally want to retain control of the business. We know how to run this business and don’t want outsiders trying to influence our plans. In health IT, we can build and deliver products and services in an appropriate cadence to match market demand, the funding we provide or generate from cash flow.  That’s not always true in other industries or markets.

X: How has Cognitive managed to grow as much as it has? What are the contributing factors?

DB: Focus, determination, vision, hard work, and the right incentives for our employees.  All of our employees have stock options, and are thus potential owners of the company. We feel this makes them better managers as well (of their time, work product, etc.).  So far, we have picked fast-growing markets (healthcare IT, clinical informatics, clinical decision support). Finally, we’ve also been lucky.

X: How far has Cognitive gotten with its cloud strategy?

DB: Quite far. We use Amazon Web Services for most everything we do, assuming we have a choice. With government projects, sometimes we do not have a choice. We either build and deploy in the public cloud or the “GovCloud” (if we are working for the government).  It works really well and we’re very happy with this delivery model.  At the last company that I ran, we had to build a large data center to deploy our software products/solutions.  This model has been a much more efficient use of capital and labor.

X: Have you completed development of the enterprise class clinical decision support platform?

DB: No, not yet.  We’ve got substantial portions of the platform built, and most projects that we do for the government add to that project in some way. Sometimes it’s in the form of software components; sometimes it’s open industry standards that we develop on behalf of the government; and sometimes, it’s the experience we get in building a solution to a difficult problem in healthcare IT.

X: Can you give an example of how Cognitive is addressing some of the critical challenges in healthcare, such as medical errors or helping physicians keep up with the explosion of knowledge and medical literature?

DB: In terms of commercial products, we’ve delivered one product in partnership with the Neonatal ICU (NICU) at the University of North Carolina, Chapel Hill. It allows the nurses and clinical care staff in the NICU to capture clinical-quality data via a mobile application that sits on an iPad or Android device at the point of care.

One example of the type of data it’s capturing is … Next Page »

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West Coast Biotech Roundup: Global Blood, Invitae, GeneWEAVE, Adynxx

Thu, 08/13/2015 - 18:26

Before the arrival of the summer doldrums, Global Blood Therapeutics managed to go public, although “managed” probably isn’t the right word for a debut that beat pre-IPO targets and then doubled its price the first day on the Nasdaq. It’s a big vote of confidence in the South San Francisco, CA-based company, whose lead drug is a once-a-day pill, to be taken for life, to treat sickle cell disease.

If approved, it would be a welcome option for the roughly 100,000 Americans, and millions more worldwide, who have very few options other than palliative care. But it’s also a risky bet, as the disease is a target for more radical gene-therapy treatments that in a few years could displace a chronic pill.

There might not be more biotech IPOs this month, but unless China’s economic malaise spreads quickly, or investors decide while at their beach houses the next couple weeks that biotech is, like, so 2014, we’re likely to see more activity after Labor Day.

There ain’t no cure for the summer roundup blues, but let’s get to the rest of the week’s news.

—Genetic test maker Invitae (NASDAQ: NVTA) of San Francisco and four academic collaborators published a study in JAMA Oncology that suggests testing for multiple genes implicated in breast and ovarian cancer—other than the well-known BRCA1 and BRCA2 genes—could help guide treatment decisions. Invitae presented the results as evidence that its tests are candidates for insurance reimbursement. Convincing payers that a cancer diagnostic product can change a doctor’s care decisions is a key part of the business, as I wrote about in last week’s In Translation column.

—Another Bay Area test maker, GeneWEAVE Biosciences of Los Gatos, CA, exited the business via a $190 million buyout by Roche. The deal could include $235 million more in future payments if the GeneWEAVE technology to detect drug-resistant bacteria pans out.

—In Washington state, the recently defunded Life Sciences Discovery Fund said it would put the $2 million left in its coffers toward grants for entrepreneurs trying to bring their ideas and products to market.

—Staying Northwest, our Seattle-based biotech columnist Stewart Lyman paused to reflect upon the career of Frances Kelsey, who passed away after passing the century mark. She was the FDA regulator who saw the birth-defect problems with thalidomide in Europe and raised a red flag about the drug’s potential approval in the U.S.

—There was a West Coast angle to one of the biggest private biotech fundings of the year; Bill Gates and his advisor Boris Nikolic were part of the syndicate behind gene editing startup Editas Medicine’s $120 million Series B round.

—Roche’s Genentech division, based in South San Francisco, said yesterday that its drug venetoclax, to treat chronic lymphocytic leukemia with a 17p genetic deletion—found in roughly a third to half of all CLL patients—showed positive results in a pivotal Phase 2 trial. The drug is partnered with AbbVie.

—Adynxx of San Francisco reported positive Phase 2 data Tuesday for its pain drug AYX1, which was tested in patients following knee replacement surgery.

Photo of California’s Bixby Bridge courtesy of flickr user Giuseppe Milo via a Creative Commons license. Mille grazie, Giuseppe!

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Dr. Frances Kelsey: American Hero, Government Regulator

Wed, 08/12/2015 - 04:00

Dr. Frances Kelsey passed away last week at the ripe old age of 101. She was a true hero in every sense of the word. How did she achieve this status? She did not pull someone out of a burning building. Didn’t dive into a lake to rescue a drowning child. Never threw herself on a hand grenade to save troops in combat, although she did find herself on a different type of battlefield. She became a hero in a most un-extraordinary way: she simply did her job in the most thorough, competent, and professional way imaginable.

In the early 1960s Kelsey was a new employee with the FDA in Washington D.C. She was tasked with reviewing an application to approve a new drug, Kevadon, which was to be used as both a sleeping pill and a morning sickness treatment. The drug, which had been approved in Europe some four years earlier, was already earning lots of money for its West German manufacturer Chemie Grünenthal. It was available in West Germany as an over-the-counter drug (sold under the name Contergan), meaning no prescription was required. The William S. Merrell drug company had licensed the drug to sell in the U.S., and had already distributed samples of it to 1,200 doctors.

In those days, drug companies could distribute experimental therapies pre-approval for “testing” by doctors. That primed the pump so everything was in place to sell the drug once approved by regulators. William S. Merrell officials repeatedly complained both to Kelsey and her superiors at the FDA that she was taking too much time reviewing the company’s application, asking too many questions, and costing them millions of dollars in lost drug sales. Powerful pharma lobbyists likely railed to members of Congress about her handling of the application. Senator Estes Kefauver once described them by saying, “These drug fellows pay for a lobby that make the steel boys look like popcorn vendors.” The pressure on Kelsey to approve the application must have been tremendous.

Kelsey, however, did what good scientists are trained to do. She looked carefully at the data, found the safety information unconvincing, and asked for more of it. Her superiors at the agency backed her up. Eventually, information started to come in from Europe that the drug was associated with a specific type of birth defect known as phocomelia. Some children born after their mothers took Kevadon (more widely known these days by its generic name, thalidomide) were born with severe birth defects, including seal-like appendages in place of arms or legs. Some 10,000 children were born in Europe with phocomelia, and it’s estimated that 40 to 50 percent of them died. A much smaller number of children with phocomelia were born in the U.S. as a result of doctors giving samples to pregnant women prior to its approval. Chemie Grünenthal pulled the drug off the West German market in late 1961, although Merrell waited until March of 1962 to withdraw its FDA application.

By carefully considering the application and holding up its approval, Kelsey (and her colleagues at the FDA) prevented what would have been a public health disaster in the U.S. Publication of the thalidomide story by the Washington Post made her (and them) national heroes. For her efforts, John F. Kennedy gave Kelsey the President’s Award for Distinguished Federal Civilian Service in 1962. Public opinion, stoked by the news of the thalidomide disaster, helped facilitate the passage in 1962 of the Kefauver-Harris Amendment to the Federal Food, Drug, and Cosmetic Act of 1938. The Amendment is considered to be one of the best examples of consumer protection legislation, even though its opponents complained that it would “unnecessarily expand the power of government, threatening the viability of the pharmaceutical industry, and inserting Washington bureaucrats between patients and their doctors.”

In 2010 the FDA named the Drug Safety Excellence Award after Kelsey, who fittingly was its first recipient. She continued to work at the agency until her retirement at age 90.

These days, of course, the story would have been written, at least in some quarters, with a completely different spin. We’d be reading about a “petty Washington bureaucrat” who was unnecessarily blocking the release of a marvelous new drug that was desperately needed by the American people. We’d hear how the company that wanted to sell the drug would certainly not have asked that its new medicine be approved without having data showing that it was both safe and effective. Some non-scientist would claim there was doubt about the basic science, and that there were genuine disagreements as to what the data meant. If the science simply hasn’t been decided yet, why hold up the application? Dr. Kelsey’s competency and personal integrity would be questioned. We’d hear how her actions were both an affront to personal freedom and harming the reputation and financial status of Merrell. After all, the drug had already been approved for sale in Europe. Why were regulators unnecessarily delaying its approval here in the U.S.?

Thankfully, that’s not the way the narrative was cast back in the day for the American people. The truth came out, a public health disaster was averted, and important drug regulations were put in place that are still in effect today. Keep this story in mind the next time you hear someone tell you that America can be made great again if we simply remove all of those strangling regulatory hurdles imposed on us by the government.

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As Google Restructures to Alphabet, Innovation Remains in Focus

Tue, 08/11/2015 - 18:53

Most tech companies fear that growth could stifle innovation. At Google, founders Larry Page and Sergey Brin have historically suppressed that concern by using its billions of dollars in advertising and search engine revenues to invest in, build, and acquire creative technology.

Now the Silicon Valley search giant is separating what The New York Times characterized as its “moneymaking businesses from the moonshot ones.” The company is creating a new parent organization—called Alphabet—under which it will run a flock of other businesses separately. One of those is the moneymaking Google business that includes the company’s search, advertising, and Android mobile operating system businesses.

Other entities that will be run under Alphabet include investment arms Google Ventures and Google Capital; companies Google currently operates independently such as Calico, a biotech focused on aging, and Nest, the maker of devices like smart thermostats (which Google bought last year); and Google X, the company’s secretive technology development branch that is working on projects such as self-driving cars and drone services.

Separating the businesses alleviates a concern that multiple media outlets noted has been a thorn in Google’s side: the need to give the company’s stakeholders greater insight into both its money-making operations and its investments in innovation. That will allow Page and Brin, who will be CEO and president of Alphabet, respectively, to continue operating the part of the business focused on the “moonshot” projects more like a venture capital firm, as The Verge pointed out. Sundar Pichai, a top-ranking product and engineering executive, is taking over as the CEO of Google.

Back when Google acquired Nest, Xconomy’s Wade Roush wrote that “Google is getting too big.” He argued that the company’s size and acquisitive streak was a threat to both technological innovation and consumer privacy. The Alphabet news would seem to address the first concern (at least in part), but not the second.

At base, the restructuring move is meant to keep the business innovative, The New York Times wrote. Likening the new structure to Berkshire Hathaway’s empire of businesses in myriad sectors, The Times said it gives each of the individual operations more leeway in their decision-making.

Alphabet may be able to raise funding for an individual company without affecting the broader Alphabet investor base, The Verge wrote. It could also allow the CEOs of individual companies in Alphabet the opportunity to do something like raise money in the public markets.

And those companies will seemingly continue to create partnerships with outside businesses. The day after the restructuring, San Diego-based DexCom announced it signed an agreement with Google’s life sciences team to build smaller and less expensive continuous glucose monitoring devices for people with diabetes.

While Alphabet could still lose money on missed investment shots, the new structure allows the founders to find big opportunities that would have otherwise been missed if there was too much pressure to not spend on innovation by investors with shorter horizons, as Vox wrote.

Separating the various businesses also provides greater insight for investors into what parts of the business are performing well or not performing. The company plans to report each segment’s results separately starting in the fourth quarter of this year, Page wrote in a post Monday.

The decision to separate its entities will make further acquisitions especially attractive for Alphabet, especially if it continues to operate them as separate business entities, like it has with Nest, according to The Next Web. Purchasing a company that once may have slightly conflicted with Google’s legacy business is now possible because it could be run independently.

One question going forward will be whether Google gets in any trouble with other companies because of its new name—one that is used by multiple other entities, including BMW, which owns the domain www.alphabet.com, as The New York Times reported. Before revealing that BMW owns the domain, The Times quipped: “One can only assume that before Larry Page and Sergey Brin chose Alphabet as the name for their new holding company, they Googled it.”

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San Diego Newcomer Airbitz Raises $450K for Bitcoin Technology

Tue, 08/11/2015 - 15:00

Airbitz, a downtown San Diego startup with a vision of bringing digital currency to the masses, said it recently raised $450,000 of what is expected to be an initial seed round of more than $1.2 million.

In presentations over the past year, Airbitz co-founder and CEO Paul Puey has said the company’s vision is “to bring Bitcoin to the next billion users” through a decentralized, Web-based platform that emphasizes customer ease of use and ease of security. The company’s lead product is a mobile app that operates as a digital wallet for bitcoins.

Puey, a former Nvidia senior engineer and small business operator, says Airbitz now has nine employees, including co-founder and CTO Tim Horton, co-founder and chief architect William Swanson, co-founder and design vice president Damian Cutillo, and COO Rich “Henri” Chan.

According to Puey, Airbitz has combined existing technologies in a new way, using encryption, backup, two-factor authentication, two-device synchronization, and password recovery to make the Airbitz network secure at the device level.

Airbitz says its software enables users to control their bitcoins and easily transfer bitcoins between accounts. According to the company, the security measures prevent third parties from accessing user funds or data in the network or on a device. Airbitz itself has no access to customer funds or data.

The company’s bitcoin wallet, which automatically encrypts, secures and backs up user data, became available last fall on the Apple App Store and Google Play.

Block26, a recently formed Bitcoin-focused venture fund in Los Angeles, said its $450,000 investment in Airbitz marks its first investment. In a statement, Block26 co-founder and managing principal Ni’coel Stark says Airbitz is far more than a digital wallet. The security technology can be adapted for use in other sectors, she said.

As an example, Puey said the company’s security technology could be adapted for use with QuickBooks, Intuit’s accounting software used mostly in small to medium businesses, and would make it easier to synch data across multiple desktop computers and mobile devices.

Founded in early 2014, Airbitz also was selected to spend 10 weeks in the Plug and Play accelerator program held earlier this year in Sunnyvale, CA. In addition to workshops, mentorships, and networking, Airbitz qualified to get as much as $25,000 from Plug and Play Ventures in the form of a loan that can be converted into Airbitz stock.

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Online Retailer GovX Raises $11.5M to Expand Member-Only Services

Tue, 08/11/2015 - 11:31

San Diego-based GovX, an e-commerce retailer that operates like an online military base exchange for qualified U.S. Armed Forces, law enforcement, and public safety personnel, said it has raised $11.5 million from investors to expand its exclusive array of discounted products and services.

Two existing shareholders, Alestra Ltd. and Arbor Group, led the round, which was joined by principals from Star Avenue Capital, Seth Hamot, chairman of SPY Optic and a principal at Roark, Rearden & Hamot Capital Management, and Phil McConkey, the former NFL player whose financial services firm, San Diego-based Academy Securities, managed the financing.

In a recent statement, GovX also named two new board members: David Alberga, the former CEO and chairman of The Active Network; and Thomas Davin, CEO of 5.11 Tactical, the Costa Mesa, CA-based provider of clothing, boots, and gear for law enforcement use.

GovX, founded in 2011, grew out of the experience that Marc Van Buskirk and his wife Shannon had operating an e-commerce site for Oakley, the Orange County maker of sunglasses, goggles, and other sporting accessories. Their website, US Standard Issue, sold Oakley products direct to military and government personnel at a discount.

After the Italian eyewear maker Luxottica acquired Oakley for $2.1 billion in 2007, the Van Buskirks started over, with the idea of offering thousands of premium brand products through an online marketplace operating exclusively for active duty, reserve, and retired U.S. military personnel, and government public safety workers.

The Van Buskirks founded GovX in late 2011 with their friend Tony Farwell, a financial expert with expertise in corporate governance and shareholder communications. The company wraps its lifestyle marketing with patriotic zeal, emphasizing that the men and women who serve and protect “deserve extra online savings,” and partnering with various military service associations.

GovX says it developed technology to verify members’ service records, and now has nearly two million active members. The company says it offers nearly 100,000 products from over 500 premium brands.

GovX also operates a ticketing platform for more than 65,000 events, including major professional sporting events, select college sports, auto racing and other events and concerts.

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Why San Diego Is Better than Silicon Valley for AI Startups

Mon, 08/10/2015 - 15:04

Xconomy recently gathered some of the region’s leading minds in brain research and artificial intelligence for a discussion about research on the brain, and emerging areas of neurotechnology innovation . It was a mix of investors, academics, and entrepreneurs. Leading our discussion was UC San Diego Professor Ralph Greenspan, who helped advise President Obama to create the federal BRAIN Initiative. Grenspan also serves as co-director of the state’s Cal-BRAIN initiative.

The conversation followed a predictable path when someone asked, “What do we need to do to make San Diego the global center of brain research and artificial intelligence?”

The usual complaints ensued about the shortage of local early-stage capital, the isolation of UC San Diego resources, and the paucity of technical talent. A few years ago, I would have agreed with these grumblings. But not now. Like the rest of the world, San Diego has changed. And we are the beneficiaries. I am not a brain researcher but I am a serial entrepreneur.

I believe there is no better place to start a high-tech company than San Diego – especially if you are in artificial intelligence.

I’ve started two AI companies in the past seven years. My first was sold to ai-one in 2011. My current company, Englue, recently beat Palantir and IBM Watson to win a Lockheed Martin contract for the US Navy.

Englue uses AI to generate sales leads for B2B marketers and salespeople. In the past two years, more than 11,000 small- and medium-sized businesses have signed up to use Englue’s technology to find their next Federal contract. Our flagship product, LeadCrunch, finds high-precision leads just like your best customers.

Generating new business leads might not seem as sexy as building artificial brains for robots. But it is far more important: Every business in America depends upon their ability to find and win customers. The highest calling for artificial intelligence is to improve the lives of humans. So a great place to start is to empower people to achieve the American dream by building great companies—one delighted customer at a time.

Englue has overcome many of the shortcomings for startups in San Diego. How did we do it? We took advantage of the strengths of San Diego and traveled to compensate for the weaknesses. We focused on people first, technology second. Three of our five full-time team went to graduate school at UCSD. We were fortunate to attract the attention of the Rady School of Business, which provides free office space and mentoring through its StartR accelerator.

We enlisted the help of scientists, business, and community leaders who would never give us the time of day if we were in San Francisco or New York. From them we got advice in three critical areas: Market, product, and technology.

One of the first to help was Marv Langston who was the first chief information officer of the U.S. Navy. He also held senior positions at DARPA and the Defense Department in a civilian rank equivalent to a three-star admiral. After chasing numerous government contracts, Marv gave us honest, tough-love advice more valuable than gold: Focus on commercial success. “The government,” he said, “has nothing but time on their hands to meet with anyone and everyone. Go find customers who need your technology so badly that they can’t live without it.”

So we talked to hundreds of companies to find out why they registered to use our technology. We found all of them were dissatisfied with their ability to identify new customers. Along the way, we met Michael McCafferty, who invented customer relationship (CRM) software in the 1980’s (it was called TeleMagic). Mike’s advice helped confirm radical new ideas that differentiate us from our competitors, such as our two-minute signup process and (ironically) no requirement for a CRM.

To win in a competitive market, we knew we need great technology. San Diego gave us many unfair advantages. For starters, we have unfettered access to the phenomenal talent pool at UCSD. We soon met David Fogel, one of the world’s leading experts in artificial intelligence. He’s authored more than 200 peer-reviewed papers and is a pioneer in the field of evolutionary computation. This approach enables machines to evolve knowledge through a process of trial and error—similar to the way children learn.

It works so well that Fogel has started three companies: Natural Selection solves problems for the military, pharmaceutical industry, and even pro sports; NS Financial trades stocks; and Effect Check (my favorite) predicts how language will affect an audience. For a good laugh, consider the profound differences between the announcements to run for President by Gov. Jeb Bush and Donald Trump. Yes, Fogel’s analysis shows Bush has more class.

It’s true that San Diego suffers a dire shortage of early-stage venture capital (so-called seed or angel funding). This is ironic since … Next Page »

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Coursera, UC San Diego Use MOOCs to Make Workers More Job-Ready

Mon, 08/10/2015 - 01:01

After establishing a new office of online education earlier this year, UC San Diego recently unveiled plans to develop massive open online courses—or MOOCs—to better prepare workers for jobs in two specialized tech sectors.

Under a “global skills initiative” announced by Mountain View, CA-based Coursera, UC San Diego said it will be working on the classes with Qualcomm (NASDAQ: QCOM), the wireless technologies giant, and San Francisco-based Splunk (NASDAQ: SPLK), a big data software developer.

Coursera said last week its initiative is intended to provide workers with needed skills in today’s tech economy.

According to a 2015 ManpowerGroup survey, a third of employers in the U.S. and 38 percent of global employers report difficulties filling job vacancies due to “talent shortages.” When asked why, employers cited “lack of applicants,” (33 percent); lack of experience (19 percent), and lack of technical competencies or hard skills (17 percent).

Coursera, which provides free online classes, says it is working with a handful of industry partners and research universities to close the skills gap by making online students more work-ready. Two other big MOOC providers, Mountain View, CA-based Udacity and Cambridge, MA-based Edx also offer online courses that bring together the academic and private sectors, according to a recent report in The Wall Street Journal.

UC San Diego is working with Coursera and its industry partners to develop online course sequences in two specializations. One involves a Qualcomm subsidiary, Qualcomm Technologies, which is helping UC San Diego and Coursera develop online classes in the “Internet of Things,” technology that typically uses low-power wireless networks to connect inexpensive sensors and devices that only need to occasionally “chirp” bursts of data. The other involves Splunk, a leading provider of “big data” software, which is helping the San Diego Supercomputer Center at UC San Diego create online classes in “Big Data.”

Jeff Elman, a professor of cognitive science who was named as the inaugural director of UC San Diego’s new Office of Online and Technology Enhanced Education, calls the global skills initiative “a big deal.” As he explained, “One of the campus’ objectives in the online space is to promote access to and cultivation of skills that will enhance job readiness. Working with corporate partners is a great way to accomplish this.”

As director of online education at UC San Diego, Elman says he also has an opportunity to explore innovative methods of technology-based teaching and learning for both online students and UCSD faculty. The new online learning platform, UC San DiegoX, will host its first free, non-credited course, Computer Graphics CSE 167x, beginning Aug. 17. The class will be taught by Ravi Ramamoorthi, a professor in the Department of Computer Science at the Jacobs School of Engineering.

Elman recently responded to some questions about his new role at UC San Diego and the emergence of MOOCs. Our email exchange has been lightly edited.

Xconomy: Considering the controversies over online learning that erupted at San Jose State University and elsewhere, do you feel any trepidation about overseeing online education for UC San Diego?

Jeff Elman: I think that many faculty (and students as well) have understandable reservations about how to use online technology in education. The experience that many of us have with earlier forays into this field has not always been positive. And then of course the ‘MOOC mania’ that erupted in … Next Page »

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With $16M Series B, Antiva Hopes to Kill Cancer-Causing HPV

Thu, 08/06/2015 - 08:55

Antiva Biosciences may have a new name, but its mission is the same: to develop the first antiviral therapy meant to stop human papillomavirus infections from turning into cancer.

The Menlo Park, CA-based company, founded in San Diego three years ago as Hera Therapeutics by Karl Hostetler, now has some funding to pursue its vision. Antiva announced this morning that it has received a $16 million Series B round to help it take its lead antiviral compound, ABI-1968, through Phase 1 trials. The round was led by Canaan Partners and Sofinnova Ventures.

The Series B is small, but Antiva believes it will bring the company through Phase 1 to gain the proof-of-concept data to show that the treatment is safe and biologically active against HPV, the primary cause of cervical cancer, according to Gail Maderis, the company’s newly appointed CEO. The company hopes it can apply ABI-1968, a chemical compound, intra-vaginally as a topical cream. The compound becomes active once inside the HPV cells, Maderis says.

“It’s a pretty streamlined path through the Phase 1 study,” Maderis says. “Then we’ll secure funding to take us further.”

Antiva has already shown some positive results. Last August, the company presented data that showed HTI-1968 blocked the replication of three types of HPV cells, including two that cause 70 percent of cervical cancer. Surgery is currently the only therapy available to women with those types of HPV, the company said at the time.

Antiva hired Maderis as CEO along with the funding announcement, and also said it was appointing pharma executive Steven James as chairman. Maderis most recently ran Northern California biotech industry organization BayBio and, before that, South San Francisco-based Five Prime Therapeutics (NASDAQ: FPRX). James previously ran Labrys Biologics, which sold to Teva last year for $200 million upfront (and potential milestone payments), and KAI Pharmaceuticals, which sold to Amgen for $315 million in 2012.

Vaccines such as Merck’s Gardasil have been available for years, but they’re only preventative and aren’t widely used, as Xconomy’s Bruce Bigelow reported when he profiled the company last year.

“While the vaccines are an important contribution, they’re not solving the problem,” Maderis says. “There’s about $4 billion spent annually on the diagnosis and treatment on HPV. That gives you a picture of the opportunity here.”

Antiva’s compound may be able to do more than just kill HPV. It also may be able to slow the development of cancer if it’s already started, she says. HPV shuts down certain tumor suppressors in cells; by killing the virus, the suppressors may be able to function again, Maderis says.

The company changed its name from Hera (after the Greek goddess, a reference to women’s health) to Antiva (to represent antiviral) to indicate it has broader antiviral potential. Antiva expects it may be able to treat other cancers that can develop from strains of HPV, including anal, neck, and head cancers, Maderis says. The company may also eventually study other compounds it has licensed from Hostetler, the founding CEO, that could potentially target viruses such as HIV, the herpes virus, and cytomegalovirus.

“We hope the new name better reflects the broad scope of our pipeline and our product opportunity, Maderis says.

Hostetler is a titan of the virology industry, having previously founded San Diego-based Vical, Chimerix (NASDAQ: CMRX), and Triangle Pharmaceuticals, which was acquired by Gilead in 2003 for $464 million. Both Chimerix and Triangle are based in Durham, NC.

Antiva, which relocated from San Diego, has previously raised about $2.4 million in other funding.

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